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On May 19, 2015, Computer Sciences Corporation (CSC) announced that its board had approved a plan to separate the company into two publicly traded businesses. The rounded “$8B” and “$4B” figures in the headline refer to the businesses’ reported fiscal 2015 revenue—not their valuations. CSC described the transaction as a way to give commercial and U.S. public-sector customers businesses with distinct strategic focuses.
What CSC announced in May 2015
CSC planned to separate its global commercial operations from its U.S. public-sector business. The company said shareholders would hold shares in both businesses after the separation. The announcement described the following FY15 revenue and operating figures as company-reported information:
| Planned business | Customers and focus | CSC-reported FY15 revenue | Other reported scale | Later milestone |
|---|---|---|---|---|
| CSC Global Commercial | Global commercial clients and non-U.S. government clients | $8.1 billion | More than 1,000 customers, including 175 Fortune 500 companies; 51,000 employees; 34 delivery centers | CSC’s commercial business later combined with HPE Enterprise Services under the DXC Technology name. |
| CSC U.S. Public Sector | U.S. federal, state, and defense agencies, as well as national-security customers | $4.1 billion | 14,000 employees | It separated from CSC as CSRA, which announced its completion as an independent public company on November 30, 2015. |
The revenue figures describe fiscal 2015, as reported by CSC in its May 19, 2015 announcement filed with the SEC. They are historical operating figures, not current revenue, sale prices, market values, or estimates of what either business was worth.
Why CSC said it wanted two companies
CSC’s stated case was that the businesses served markets with different customer needs and growth opportunities. Commercial clients, the company said, wanted partners that understood their businesses and could support digital transformation. U.S. public-sector clients sought providers with government-specific experience.
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CSC also pointed to differing growth profiles and cash-flow dynamics, the opportunity to optimize each business’s capital strategy and costs, and competition for IT talent. CEO Mike Lawrie said, “Our analysis shows significant benefits of going with a pure-play strategy.” That was the company’s argument for the proposed separation, not independent evidence that the plan would deliver those benefits.
The announcement said each business would have the scale and focus to address its own customer needs and market requirements. These were CSC’s stated objectives; the announcement alone does not establish whether the separation improved performance or shareholder returns.
What shareholders were told about the transaction
CSC said it intended to pay a special cash dividend of $10.50 per share at closing and expected the separation to qualify as tax-free to shareholders. These were announced terms and expectations. The release does not establish the tax treatment realized by every shareholder, which can depend on individual circumstances.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Was the split completed, and what followed?
The U.S. public-sector separation was completed: CSRA announced on November 30, 2015, that it had completed its separation from CSC and was trading as an independent public company. It also reported completing a combination with SRA International. The CSRA announcement confirms that milestone.
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On the commercial side, a later company release identified DXC Technology as the name of the business formed by combining CSC and HPE Enterprise Services. That company announcement documents a later development, but does not provide a complete account of the successor businesses’ present-day ownership or status.
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